Cost-effective energy conservation measures in public buildings of the city (such as schools, sports schools, after-school educational institutions, medical establishments, kindergartens) will reduce the energy consumption up to 45% depending on the set of actions (estimated energy savings of the building after an energy conservation).
EBRD experts propose to create public enterprise, which will be working as ESCO contract company (Energy Savings Performance Contracts). ESCO public enterprise shall perform energy conservation of a building with its funds. It is to reimbursable costs by receiving the savings achieved during the period. The ESCO contracts are to be signed for the period of 10 years, for now. Also the bill was submitted to the Parliament which is to extend this period to 15 years. Advantages Energy service for 20 years already successfully used in 18 European countries. In Ukraine, ESCO legislation was adopted in 2015.
The project aims to create a public ESCO Company in Bila Tserkva. The Company shall invest into energy conservation measures for public buildings to reduce the pressure on the City’s budget. The loan will be repaid from the percentage of the energy savings.
ESCO contract provides the opportunity to perform turnkey energy conservation projects. The company will receive a return on its investments within the further term of the contract by receiving the percentage of the energy savings.
The procedure for payback to the ESCO Company is as follows:
- Costs for buying equipment and its operation (maintenance and balance) are provided by ESCO Company;
- The resulting energy savings are shared between the customer and the company in the ratio specified in the contract;
- Installed equipment is transferred to the customer at the end of the contract by residual or redemption price.
Terms of loan:
- EBRD loan – up to 6 million EURO with the Interest rate 7% per annum;
- Clean Technology Fund loan – up to 2 million EURO with the Interest rate 1% per annum;
- Investment co-financing grant (non-refundable) from the Eastern Europe Energy Efficiency and Environment Partnership (E5R) – 2 million EURO;
- The maturity of the loan – 13 years;
- Grace Period – 3 years;
- Maturities of the principal amount of the loan – 10 years;
- The City provides financial guarantees to the Bank;
- Tender procedure will be held by the EBRD (international standard).
Experts of the NGO GoLOCAL provide consulting and communication support to the members of the City Council in the preparation of project documentation and negotiations with the IFIs on the possibility of a loan.
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